JOBS BOOM: US Companies Add a Robust 227,000 Jobs in October

WASHINGTON (AP) – U.S. companies added 227,000 jobs in October, according to a private survey, a healthy gain that suggests businesses can still find workers even with the unemployment rate striking 49-year lows.
  
Payroll processor ADP said that employers added jobs in manufacturing, retail, and professional services such as engineering. October’s hiring was the strongest in eight months.
  
The report Wednesday comes two days before the publication of the government’s jobs report. Economists believe that the Labor Department numbers will show employers added 190,000 jobs. ADP’s report doesn’t include government employment and frequently diverges from the official figures, however.
  
The two reports also respond differently to hurricanes. ADP’s figures were mostly unaffected by Hurricane Michael, which struck Florida last month, because its report counts someone as employed even if they miss work due to bad weather.
  
The government’s jobs data, however, counts someone as employed only if they were paid during the period when the government conducted its jobs survey. That could lower the government’s employment count when it’s released Friday.
  
The unemployment rate fell to 3.7 percent in September, the lowest level since 1969. Businesses are staffing up at a rapid pace in response to healthy consumer spending and strong economic growth.
  
That’s forcing more companies to raise pay to attract and keep workers. A separate report Wednesday showed that wages and salaries for private-sector workers rose 3.1 percent from a year earlier. That was the strongest annual gain in more than a decade.
  
A measure of compensation that includes benefits and covers all workers, including government employees, rose 2.8 percent in the third quarter from a year earlier, the Labor Department report said.
  
Americans boosted their spending by the most in nearly four years in the July-September quarter. The economy expanded 3.5 percent, though most economists forecast growth will fall below 3 percent in the final three months of this year.

Copyright 2018 The Associated Press. 
 

UPDATE 1-Electronic sensor group First Sensor prepares for potential sale -sources

* DPE received interest for First Sensor – sources

* DPE expected to hire financial adviser shortly – sources

* Any buyer of stake would have to make full takeover offer (Adds details on possible buyers, industry context)

By Arno Schuetze and Liana B. Baker

FRANKFURT, Oct 31 (Reuters) – First Sensor, which makes electronic sensors used in industrial, medical and driverless cars, is being prepared for a potential sale by its main owner Deutsche Private Equity (DPE), people close to the matter said.

DPE is considering options for First Sensor after receiving interest in the company, in which it first invested in 2011, the sources said. The sources also said that DPE was expected to hire a financial adviser for the deal shortly.

First Sensor’s shares surged on the prospect of a possible sale and were up about 17 percent at one stage on Wednesday.

Any buyer of DPE’s 36 percent stake would have to make a takeover offer for the whole company, whose market capitalisation stood at 150 million euros ($169.83 million) on Wednesday.

First Sensor and DPE declined to comment.

Several Chinese companies have signalled they would be keen to buy First Sensor, the people said.

But they also said the company’s activities in the defence sector as well as its U.S. business would be likely attract interest from German and U.S. regulators and possibly scupper a such deal.

DPE is expected to sound out First Sensor’s rivals such as TE Connectivity and Molex Electronic Technologies as potential buyers, they said.

First Sensor has a number of rivals in the new market for light detection and ranging (LiDAR) sensors, which have potential to be the “eyes” of driverless cars. It also makes cameras for current generation advanced automotive collision detection systems.

Other LiDAR players include auto parts suppliers Continental AG, Delphi Automotive, ZF Friedrichshafen AG, chipmakers Infineon Technologies AG and Texas Instruments and specialist sensor makers Velodyne and Quanergy, among others. Some of these companies are First Sensor customers.

The company reiterated earlier this month that it expects to generate revenue of between 150 and 160 million euros this year, and an EBIT margin of 7 to 9 percent.

Half of its sales come from Germany, Austria and Switzerland, with 80 percent from Europe, 10 percent from North America and 10 percent in Asia, according to company filings.

$1 = 0.8832 euros
Additional reporting by Kane Wu and Eric Auchard; Editing by
Maria Sheahan and Jane Merriman

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/companyNews/~3/WTy6D835ko0/update-1-electronic-sensor-group-first-sensor-prepares-for-potential-sale-sources-idUSL8N1XB7J7

GM offers buyouts to cut costs after strong quarterly profit

DETROIT (Reuters) – General Motors Co (GM.N) on Wednesday stepped up efforts to cut costs in response to tariff and market pressures, even as it reported third-quarter profit that blew past Wall Street expectations.

The No. 1 U.S. automaker said on Wednesday it is offering buyouts to salaried employees with 12 or more years of service, as Chief Executive Mary Barra told them in an email: “Our structural costs are not aligned with the market realities.”

GM had previously promised investors it would cut $6.5 billion in costs this year, and the buyouts would add to that total, a company spokesman said on Wednesday.

The Detroit automaker said in a separate statement that it would consider layoffs after it sees the impact of the buyouts and other cost cutting efforts.

About 18,000 of the company’s 50,000 salaried employees in North America are eligible for the buyouts, the company spokesman said. They do not affect the hourly workers on GM’s production lines.

GM’s move to cut staff stood in contrast to an upbeat profit outlook and its recent success in raising prices, which boosted profit before tax by $1 billion overall in the quarter, mostly in North America.

In her email to employees, Barra focused on the fact that GM has burned through $300 million in cash in its automotive operations during the first nine months of 2018. She also noted that the company’s stock price is still stuck near the $33 a share price at which it debuted in 2010 after a bankruptcy restructuring.

GM shares jumped about 7 percent in midday trading to $36.09, their highest in almost six weeks.

HIGHER MATERIALS COSTS

For Detroit’s automakers, rising materials costs caused by new tariffs on foreign metals imposed by the Trump administration are converging with a slowly deflating U.S. market and a sharper falloff in China, the world’s largest auto market.

GM and rivals Ford Motor Co (F.N) and Fiat Chrysler Automobiles NV (FCHA.MI) have all in recent weeks forecast substantial hits from steel and aluminum costs driven by tariffs.

In the third quarter, GM said it was able to raise prices by $900 million in North America, in part because it is launching a new generation of its large pickup trucks, the Chevrolet Silverado and GMC Sierra. Ford, however, has an older product line, and said its net pricing in North America fell by $318 million in the third quarter.

FILE PHOTO: The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing, Michigan October 26, 2015. REUTERS/Rebecca Cook/File Photo

The pricing gains are “absolutely sustainable,” GM Chief Financial Officer Dhivya Suryadevara said.

GM said it still sees a full-year profit in the range of $5.80 to $6.20 a share, but said it now expected to finish at the high end of the range with potential to finish even higher. It cited a favorable tax rate and its strong performance. Wall Street has been expecting $5.88 per share, according to I/B/E/S data from Refinitiv.

In July, GM lowered its full-year forecast, citing higher steel and aluminum costs due to tariffs.

The company said it still expects about $4 billion in free cash flow for the year before the impact of $600 million in pension contributions.

Excluding the effect any cost cutting it achieves, GM’s Suryadevara reaffirmed GM’s commodity costs in 2019 will increase by $1 billion over 2018. Ford has said it expects tariffs to reduce profits by $1 billion in 2018 and 2019, and Fiat Chrysler has warned rising metals costs could cost it 850 million euros ($963 million) this year and next year.

PRESSURE INCREASE

The rise in materials costs is increasing pressure on automakers to cut costs ahead of a predicted decline in U.S. vehicle demand after an unusually long bull market.

Earlier this month, Ford said it would cut its 70,000-strong global salaried workforce by an unspecified number and hoped to complete the cuts by the end of June 2019. This week, the No. 2 U.S. automaker is holding three days of meetings to discuss ways to flatten the structure of its salaried workforce and get managers to oversee larger numbers of employees.

GM has cut production at car plants over the last two years and its hourly workforce fell by 4,000 workers last year, according to GM’s annual report. In addition, GM in June ended the second shift at its Lordstown, Ohio assembly plant, cutting 1,500 jobs.

In China, GM’s largest market by vehicle sales, the automaker said it booked a record $500 million in equity income from its joint ventures. That result was in spite of the sharpest industry sales drop in nearly seven years during September.

The impact of the sales drop hit harder in China’s interior, and demand remains strong in larger cities and for luxury vehicles, including GM’s Cadillac models, Barra said on a conference call with analysts.

GM reported third-quarter net income of $2.53 billion, or $1.75 a share, compared with a loss last year of $2.98 billion, or $2.03 a share. Last year’s quarter included a charge related to Europe.

Excluding one-time items, GM earned $1.87 a share in the third quarter, easily beating the $1.25 average analyst estimate, according to I/B/E/S data from Refinitiv.

Revenue in the quarter rose 6.4 percent to $35.8 billion, above the $34.85 billion analysts had expected.8826 euros)

Reporting by Joe White and Ben Klayman in Detroit, additional reporting by David Shepardson in Washington; Editing by Nick Zieminski and Bill Rigby

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/businessNews/~3/f5eNPfw_NKE/gm-offers-buyouts-to-cut-costs-after-strong-quarterly-profit-idUSKCN1N51LP

UPDATE 3-Estée Lauder sales beat as China demand booms, shares rise 12 pct

(Reuters) – Estée Lauder Cos Inc (EL.N) joined rival L’Oreal SA (OREP.PA) in dismissing fears of a slowdown in China on Wednesday as its quarterly results beat Wall Street estimates on booming demand for cosmetics and high-end skincare products.

FILE PHOTO – Lipstick is displayed in the M.A.C flagship store in Paris, February 28, 2013. REUTERS/Philippe Wojazer

Chief Executive Officer Fabrizio Freda, like L’Oreal CEO Jean-Paul Agon earlier in the day, said he saw no signs of the slowdown expected by many investors due to pressure on Chinese growth from U.S. tariffs and easing global demand.

Those comments lifted shares across the consumer sector in both Europe and the United States, with Estée Lauder up as much as 12 percent.

“(In China) there is risk that the momentum slows going forward but it appears to be performing better than expected in the short term,” Morgan Stanley analyst Dara Mohsenian said.

Estée Lauder has launched several high-end skincare brands and collaborated with Chinese celebrities like Yang Mi, Hua Chenyu and Fei Fei Sun that is driving sales to affluent millennial consumers in China. Overall, sales in the Asia-Pacific region rose 24 percent, led by China and Japan.

L’Oreal reported stronger-than-expected results earlier on Wednesday. Fashion group Gucci’s owner Kering (PRTP.PA) and Italian down jacket maker Moncler (MONC.MI) have also played down gloomy market views on China.

Estée Lauder said it expects to grow at a faster clip than the broader global prestige beauty industry’s market growth rate of 5 percent to 6 percent for fiscal 2019, and raised its full-year profit forecast.

The company now expects fiscal 2019 adjusted earnings per share of $4.73-$4.82, above its prior forecast of $4.62-$4.71. Analysts had estimated $4.75 per share.

Net sales are expected to grow between 4 percent and 5 percent or between $14.24 billion and $14.38 billion. Analysts on average expected $14.31 billion, according to Refinitiv data.

Estée Lauder said its outlook takes into account the impact of tariffs on future moderation of net sales growth in China and the travel retail market, which it has not experienced to date.

Excluding items, the company earned $1.41 per share, while net sales rose nearly 8 percent to $3.52 billion. Both topped Wall Street estimates.

Reporting by Siddharth Cavale and Jaslein Mahil in Bengaluru; Editing by Arun Koyyur and Saumyadeb Chakrabarty

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/companyNews/~3/A__WGyZnNM8/update-3-este-lauder-sales-beat-as-china-demand-booms-shares-rise-12-pct-idUSL3N1XB4YE

UPDATE 5-GM offers buyouts to cut costs after strong quarterly profit

DETROIT (Reuters) – General Motors Co (GM.N) on Wednesday stepped up efforts to cut costs in response to tariff and market pressures, even as it reported third-quarter profit that blew past Wall Street expectations.

The No. 1 U.S. automaker said on Wednesday it is offering buyouts to salaried employees with 12 or more years of service, as Chief Executive Mary Barra told them in an email: “Our structural costs are not aligned with the market realities.”

GM had previously promised investors it would cut $6.5 billion in costs this year, and the buyouts would add to that total, a company spokesman said on Wednesday.

The Detroit automaker said in a separate statement that it would consider layoffs after it sees the impact of the buyouts and other cost cutting efforts.

About 18,000 of the company’s 50,000 salaried employees in North America are eligible for the buyouts, the company spokesman said. They do not affect the hourly workers on GM’s production lines.

GM’s move to cut staff stood in contrast to an upbeat profit outlook and its recent success in raising prices, which boosted profit before tax by $1 billion overall in the quarter, mostly in North America.

In her email to employees, Barra focused on the fact that GM has burned through $300 million in cash in its automotive operations during the first nine months of 2018. She also noted that the company’s stock price is still stuck near the $33 a share price at which it debuted in 2010 after a bankruptcy restructuring.

GM shares jumped about 7 percent in midday trading to $36.09, their highest in almost six weeks.

HIGHER MATERIALS COSTS

For Detroit’s automakers, rising materials costs caused by new tariffs on foreign metals imposed by the Trump administration are converging with a slowly deflating U.S. market and a sharper falloff in China, the world’s largest auto market.

GM and rivals Ford Motor Co (F.N) and Fiat Chrysler Automobiles NV (FCHA.MI) have all in recent weeks forecast substantial hits from steel and aluminum costs driven by tariffs.

In the third quarter, GM said it was able to raise prices by $900 million in North America, in part because it is launching a new generation of its large pickup trucks, the Chevrolet Silverado and GMC Sierra. Ford, however, has an older product line, and said its net pricing in North America fell by $318 million in the third quarter.

FILE PHOTO: The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing, Michigan October 26, 2015. REUTERS/Rebecca Cook/File Photo

The pricing gains are “absolutely sustainable,” GM Chief Financial Officer Dhivya Suryadevara said.

GM said it still sees a full-year profit in the range of $5.80 to $6.20 a share, but said it now expected to finish at the high end of the range with potential to finish even higher. It cited a favorable tax rate and its strong performance. Wall Street has been expecting $5.88 per share, according to I/B/E/S data from Refinitiv.

In July, GM lowered its full-year forecast, citing higher steel and aluminum costs due to tariffs.

The company said it still expects about $4 billion in free cash flow for the year before the impact of $600 million in pension contributions.

Excluding the effect any cost cutting it achieves, GM’s Suryadevara reaffirmed GM’s commodity costs in 2019 will increase by $1 billion over 2018. Ford has said it expects tariffs to reduce profits by $1 billion in 2018 and 2019, and Fiat Chrysler has warned rising metals costs could cost it 850 million euros ($963 million) this year and next year.

PRESSURE INCREASE

The rise in materials costs is increasing pressure on automakers to cut costs ahead of a predicted decline in U.S. vehicle demand after an unusually long bull market.

Earlier this month, Ford said it would cut its 70,000-strong global salaried workforce by an unspecified number and hoped to complete the cuts by the end of June 2019. This week, the No. 2 U.S. automaker is holding three days of meetings to discuss ways to flatten the structure of its salaried workforce and get managers to oversee larger numbers of employees.

GM has cut production at car plants over the last two years and its hourly workforce fell by 4,000 workers last year, according to GM’s annual report. In addition, GM in June ended the second shift at its Lordstown, Ohio assembly plant, cutting 1,500 jobs.

In China, GM’s largest market by vehicle sales, the automaker said it booked a record $500 million in equity income from its joint ventures. That result was in spite of the sharpest industry sales drop in nearly seven years during September.

The impact of the sales drop hit harder in China’s interior, and demand remains strong in larger cities and for luxury vehicles, including GM’s Cadillac models, Barra said on a conference call with analysts.

GM reported third-quarter net income of $2.53 billion, or $1.75 a share, compared with a loss last year of $2.98 billion, or $2.03 a share. Last year’s quarter included a charge related to Europe.

Excluding one-time items, GM earned $1.87 a share in the third quarter, easily beating the $1.25 average analyst estimate, according to I/B/E/S data from Refinitiv.

Revenue in the quarter rose 6.4 percent to $35.8 billion, above the $34.85 billion analysts had expected.8826 euros)

Reporting by Joe White and Ben Klayman in Detroit, additional reporting by David Shepardson in Washington; Editing by Nick Zieminski and Bill Rigby

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/companyNews/~3/GBzKH6zKe-o/update-5-gm-offers-buyouts-to-cut-costs-after-strong-quarterly-profit-idUSL2N1XB0FE

Tech rebound, earnings lift mood at end of torrid month

(Reuters) – U.S. stocks rose for a second day on Wednesday, as investors snapped up technology favorites and strong results for General Motors and a host of others lifted spirits at the end of a torrid month for global equities.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 30, 2018. REUTERS/Brendan McDermid

Shares of Facebook Inc (FB.O) jumped 2.7 percent after the social media giant said margins would stop shrinking after 2019 as costs from scandals ease.

The S&P communication services index .SPLRCL, which also houses Alphabet (GOOGL.O) and Netflix (NFLX.O), rose 2.03 percent.

Amazon.com Inc (AMZN.O) and Apple Inc (AAPL.O), other members of the FAANG group, also jumped 4.0 percent and 2.6 percent, respectively.

The high-flying group has powered U.S. stock market’s decade-long bull run, but fears of rising borrowing costs, global trade dispute and possible slowdown in U.S. corporate profits have pummeled the stocks recently.

“A lot of these high-growth names have really been in bear market territory because of the slump this month, but the valuation correction is allowing some of the bulls to be opportunistic and to jump in at the right moment,” said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada.

Shares in General Motors Co (GM.N) jumped 7.5 percent and were on track to post their biggest one-day gain since late May after the No.1 U.S. automaker posted robust quarterly results and forecast strong full-year earnings.

At 11:40 a.m. ET the Dow Jones Industrial Average .DJI was up 320.21 points, or 1.29 percent, at 25,194.85, the S&P 500 .SPX was up 37.72 points, or 1.41 percent, at 2,720.35 and the Nasdaq Composite .IXIC was up 149.01 points, or 2.08 percent, at 7,310.66.

Although the S&P 500 is on track to post its first two-day gains for the month on Wednesday, it is still set for its worst monthly performance in more than seven years. The Nasdaq was on pace for its worst monthly loss since November 2008.

Defensive sectors were the only decliners, with the S&P consumer staples index .SPLRCS falling 1.03 percent, dragged down by losses in Kellogg Co (K.N).

Kellogg fell 7.5 percent after cutting its full-year profit forecast due to higher advertising and distribution costs.

Among other gainers, Yum Brands Inc (YUM.N) rose 4.0 percent and Yum China Holdings Inc (YUMC.N) 14.4 percent as strong KFC sales drove results.

Financial stocks also gained on the U.S. Federal Reserve’s proposal to ease regulations for banks with less than $700 billion in assets. The S&P financial index .SPSY rose 2.10 percent, while the S&P 500 regional banks index .SPLRCBNKS jumped 3.17 percent.

Advancing issues outnumbered decliners by a 2.24-to-1 ratio on the NYSE and by a 2.20-to-1 ratio on the Nasdaq.

The S&P index recorded seven new 52-week highs and four new lows, while the Nasdaq recorded 22 new highs and 62 new lows.

Reporting by Shreyashi Sanyal in Bengaluru; additional reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Anil D’Silva

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/businessNews/~3/5unwYtN_BCs/tech-rebound-earnings-lift-mood-at-end-of-torrid-month-idUSKCN1N51NL

US STOCKS-Tech rebound, earnings lift mood at end of torrid month

(Reuters) – U.S. stocks rose for a second day on Wednesday, as investors snapped up technology favorites and strong results for General Motors and a host of others lifted spirits at the end of a torrid month for global equities.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 30, 2018. REUTERS/Brendan McDermid

Shares of Facebook Inc (FB.O) jumped 2.7 percent after the social media giant said margins would stop shrinking after 2019 as costs from scandals ease.

The S&P communication services index .SPLRCL, which also houses Alphabet (GOOGL.O) and Netflix (NFLX.O), rose 2.03 percent.

Amazon.com Inc (AMZN.O) and Apple Inc (AAPL.O), other members of the FAANG group, also jumped 4.0 percent and 2.6 percent, respectively.

The high-flying group has powered U.S. stock market’s decade-long bull run, but fears of rising borrowing costs, global trade dispute and possible slowdown in U.S. corporate profits have pummeled the stocks recently.

“A lot of these high-growth names have really been in bear market territory because of the slump this month, but the valuation correction is allowing some of the bulls to be opportunistic and to jump in at the right moment,” said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada.

Shares in General Motors Co (GM.N) jumped 7.5 percent and were on track to post their biggest one-day gain since late May after the No.1 U.S. automaker posted robust quarterly results and forecast strong full-year earnings.

At 11:40 a.m. ET the Dow Jones Industrial Average .DJI was up 320.21 points, or 1.29 percent, at 25,194.85, the S&P 500 .SPX was up 37.72 points, or 1.41 percent, at 2,720.35 and the Nasdaq Composite .IXIC was up 149.01 points, or 2.08 percent, at 7,310.66.

Although the S&P 500 is on track to post its first two-day gains for the month on Wednesday, it is still set for its worst monthly performance in more than seven years. The Nasdaq was on pace for its worst monthly loss since November 2008.

Defensive sectors were the only decliners, with the S&P consumer staples index .SPLRCS falling 1.03 percent, dragged down by losses in Kellogg Co (K.N).

Kellogg fell 7.5 percent after cutting its full-year profit forecast due to higher advertising and distribution costs.

Among other gainers, Yum Brands Inc (YUM.N) rose 4.0 percent and Yum China Holdings Inc (YUMC.N) 14.4 percent as strong KFC sales drove results.

Financial stocks also gained on the U.S. Federal Reserve’s proposal to ease regulations for banks with less than $700 billion in assets. The S&P financial index .SPSY rose 2.10 percent, while the S&P 500 regional banks index .SPLRCBNKS jumped 3.17 percent.

Advancing issues outnumbered decliners by a 2.24-to-1 ratio on the NYSE and by a 2.20-to-1 ratio on the Nasdaq.

The S&P index recorded seven new 52-week highs and four new lows, while the Nasdaq recorded 22 new highs and 62 new lows.

Reporting by Shreyashi Sanyal in Bengaluru; additional reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Anil D’Silva

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/companyNews/~3/5c5s38c8ABQ/us-stocks-tech-rebound-earnings-lift-mood-at-end-of-torrid-month-idUSL3N1XB61B

PRECIOUS-Gold slides to 3-week low as dollar rises, stocks rebound

(Updates prices)

* Gold on track to end six-month losing streak

* Shares bounce, dollar hits 16-month high

* Silver matches Oct. 10 low

By Karthika Suresh Namboothiri

BENGALURU, Oct 31 (Reuters) – Gold fell to a near three-week low on Wednesday as the dollar scaled a 16-month peak and a bounce in stock markets following a recent rout revealed renewed appetite for riskier investments.

However, the metal remained on track for its best month since January, ending a six-month run of losses in October, the longest such streak since a period from August 1996 to January 1997, boosted by stock market volatility.

Spot gold was down 0.5 percent at $1,216.20 per ounce at 12:02 p.m EDT (1602 GMT), having touched its lowest since Oct. 11 at $1,211.52. U.S. gold futures fell 0.6 percent to $1,217.90.

“Gold has struggled to benefit as a safe haven asset,” said Suki Cooper, precious metals analyst at Standard Chartered Bank. “In the near term, gold is very much driven by the risk-environment, the equity market performance and the strength of the dollar.”

The dollar index climbed to its highest level in 16 months while stock markets bounced after a brutal October.

Gold has fallen by about 11 percent since April, hit by rising U.S. interest rates and a global trade war that threatens economic growth, prompting investors to rush to the safety of the dollar, making bullion more expensive for holders of other currencies.

“The next key event to watch is the U.S. midterm election and the real implications for gold will be based on how the dollar reacts,” Cooper said.

The midterm elections on Nov. 6 will determine whether the Republican or Democratic party controls the U.S. Congress.

“If there are signs that the Republicans are going to do well, this will probably lead to yet more dollar strength,” said Alasdair Macleod, head of research at GoldMoney.com

In other precious metals, silver fell 0.9 percent to $14.31 per ounce, having slipped as low as $14.21, matching a low last touched on Oct. 10.

“A number of factors that are impacting gold, such as the dollar and the equity markets, are as important for the silver markets. But we’re seeing a more pronounced weakness in silver because its fundamentals have weakened,” Standard Chartered’s Cooper said.

Platinum was up 0.8 percent at $839.20 while palladium rose nearly 1 percent to $1,083.10. (Reporting by Swati Verma and Karthika Suresh Namboothiri in Bengaluru Editing by Andrea Ricci and Susan Thoma)

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/companyNews/~3/jjfsSoXDR6Y/precious-gold-slides-to-3-week-low-as-dollar-rises-stocks-rebound-idUSL3N1XB63Z

UPDATE 2-U.S. Federal Reserve unveils proposal to ease regulations for larger banks

WASHINGTON (Reuters) – The U.S. Federal Reserve unveiled a proposal on Wednesday that would ease regulations for banks with less than $700 billion in assets, as the central bank looks to tailor rules in line with banks’ risk profiles.

FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie/File Photo/File Photo

PNC Financial Corp (PNC.N), Capital One Financial Corp (COF.N), Charles Schwab (SCHW.N), and U.S. Bancorp (USB.N) would enjoy reduced liquidity and compliance requirements under the proposal, which the Fed board approved on Wednesday. Several smaller banks would see further reduced regulation as the Fed implements changes ordered in a bank deregulation law Congress passed in May.

The proposal establishes four tiers of regulation for banks with over $100 billion in assets, as the central bank seeks to tailor rules for larger firms. The proposal would reserve the strictest rules for U.S. globally systemic banks, and step down requirements for smaller and less complex firms.

The law rewriting portions of the 2010 Dodd-Frank financial reform law directed the Fed to trim regulations for banks with less than $250 billion in assets, and also gave the central bank discretion to further modify rules for larger banks as it saw fit. Wednesday’s proposal goes beyond the $250 billion threshold authorized by Congress, as it aims to provide relief to all but the nation’s nine largest banks.

According to the proposal, banks with between $250 billion and $700 billion in assets could enjoy a reduced “liquidity coverage ratio,” which requires banks to hold high-quality assets that could easily be turned into cash. The Fed estimated the proposal could reduce that ratio by as much as 30 percent for those firms.

Smaller banks would be subjected to less frequent “stress tests” of their capital plans by the Fed, and face even less restrictive liquidity and capital requirements.

Randal Quarles, the Fed’s vice chair for supervision, said the changes should “meaningfully” reduce compliance costs for banks without injecting significant new risk into the banking system.

“These proposals embody an important principle: the character of regulation should match the character of a firm,” he said.

However, Fed Governor Lael Brainard voted against the proposal, arguing it went beyond Congress’s intent and exposed the financial system to unnecessary risk by easing rules on larger banks. She was the only one of the four current Fed board members to oppose the plan, which now goes forward for public comment.

The proposal reserves the strictest rules for the nation’s largest global banks, and also keeps tougher rules for Northern Trust (NTRS.O), as the Fed said banks with over $75 billion in cross-border activity should continue to face stricter rules.

The annual requirement that the Fed conduct stress tests and evaluate bank capital plans would drop to every other year for 11 banks with between $100 billion and $250 billion in total assets. Those banks also would be exempted completely from the liquidity coverage ratio and instead would be subjected to “tailored” liquidity risk management.

Quarles said Wednesday he expects the Fed to quickly move to treat the 2019 stress test cycle as the second year of the proposed two-year cycle. If the Fed adopts that change, banks with less than $250 billion would not post public stress test results until the 2020 cycle.

The proposal also gives the Fed flexibility to reimpose stricter rules on banks below $700 billion in assets if they engage in higher levels of riskier activity. Banks with over $75 billion in nonbank assets, weighted short-term wholesale funding or off-balance sheet exposure would face tougher oversight than similarly sized competitors.

The proposal does not address foreign banks or their U.S. operations. The Fed said it intends to propose a separate rule for those firms “in the near future.” The Fed also said it was working with the Federal Deposit Insurance Corporation on a proposal to tailor “living will” requirements for banks, but did not offer a timeframe for when that proposal could be made public.

Reporting by Pete Schroeder; Editing by Chizu Nomiyama and Andrea Ricci

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Carlyle misses earnings forecasts on sluggish private equity portfolio

NEW YORK (Reuters) – Carlyle Group LP (CG.O) on Wednesday missed estimates for earnings per unit for the third quarter, as the value of its private equity investments rose less than that of rivals on the back of turbulent markets in Asia.

The logo of the Carlyle Group is displayed at the company’s office in Tokyo, Japan October 17, 2018. REUTERS/Issei Kato

Carlyle, which owns assets such as British premium car service Addison Lee and U.S. entertainment services provider Apex Parks Group, said quarterly economic net income per unit came in at 25 cents. That missed analysts’ expectations for 51 cents, according to Refinitiv data, and compared with 56 cents a year earlier.

Economic net income reflects the mark-to-market valuation gains or losses on Carlyle’s portfolio and is a key earnings metric for many U.S. private equity firms.

Chief Financial Officer Curtis Buser said the “muted” ENI reflected “the impact of significant market volatility on our Asia private equity funds.”

Carlyle retains stakes in several Asian companies whose shares have fallen, with the Hang Seng Index .HSI down around 16.5 percent in the year to date compared with a slight rise in the U.S. S&P 500 index .SPX.

Overall, Carlyle’s corporate private equity funds, from which it earns performance fees, increased in value by 1 percent in the three months to end-September. Rival Blackstone Group LP (BX.N) reported a rise of 7.5 percent in the value of its private equity holdings in the same period, while Apollo Global Management’s (APO.N) private equity assets appreciated by 2.3 percent.

In a brighter spot, Carlyle’s assets under management grew to $212.3 billion, with $6 billion raised in the quarter and $26 billion raised so far in 2018. Carlyle said it expects to exceed its $30 billion fundraising target for 2018, part of a larger $100 billion fundraising goal.

“In total as of Sept. 30 we have raised $83 billion toward our multi-year $100 billion fundraising goal and are equally confident about exceeding this goal, given the funds we still have in the market and those that we expect to begin to raise over the next few quarters,” Buser said in an earnings call.

The company said it would detail its next fundraising target in 2019 and that this would likely be larger than the current $100 billion goal.

Shares were up 2.4 percent at 11:50am EST, reversing losses earlier in the session.

After-tax distributable earnings (DE) – the actual cash available for paying dividends – fell year on year to $194.7 million from $254.5 million.

Carlyle also said it would pay a quarterly distribution of 42 cents per common unit.

Reporting by Joshua Franklin in New York; Editing by Peter Cooney and Susan Thomas

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